Tax-exempt compensation for an employee using their own means for work from home

An employee can be compensated for the costs they incur when performing work from home, such as the inflated costs of energy (electricity), water, maintenance of machines and equipment, telephone and internet. The amount of the compensation has to be determined in the employment agreement and must be based on a realistic calculation.

The compensation for the use of employee’s own means for working from home is not included in the tax base of income from an employment relationship, provided that the compensation is paid in accordance with the labour law legislation and that:

─ It is determined with special provisions or based on a collective agreement or the employer’s internal act,
─ These are means that are typical, necessary and customary for performing the specific work,
─ The compensation is determined based on the calculation of the real costs and the amount is reasonable and justifiable,
─ The amount does not exceed 5% of the employee’s monthly salary or 5% of the average monthly salary of employees in Slovenia (EUR 1,806 in January 2020).

The amount of the paid compensation is added to the tax base of the income from the employee’s employment relationship in any part that exceeds the tax-exempt amount.

The employee can also claim compensation for actual costs that were incurred due to using their own means for performing work from home, wherein the agreement between the employee and employer must clearly state that the employee is the one securing the means for working from home and is therefore entitled to a compensation for these means being used. The employee claims compensation for the actual costs based on relevant evidences in the submitted objection to the informative calculation of personal income tax.